Cholinergic and glutamatergic neurons in the laterodorsal tegmentum (LDT) influence the activity of ventral tegmental area (VTA) dopaminergic neurons that project to the nucleus accumbens (NAc). A series of experiments were conducted to elucidate the role of acetylcholine and glutamate receptor subtypes in mediating spontaneous and cocaine facilitated NAc dopamine transmission. Electrical stimulation of the LDT in urethane-anesthetized rats evoked a three component change in NAc dopamine release, measured using in vivo chronoamperometry. The initial stimulation time-locked increase, subsequent decrease and final prolonged increase in dopamine release were mediated by LDT activation of nicotinic acetylcholine and ionotropic glutamate receptors in the VTA, M2 muscarinic acetylcholine autoreceptors in the LDT and muscarinic (likely M5 subtype) acetylcholine receptors in the VTA, respectively. In mutant mice with truncated M5 receptor genes the final prolonged component was absent, while the first and second were unaffected. Further studies revealed that in wild-type mice intra-VTA infusion of nicotinic and muscarinic acetylcholine receptor antagonists, as well as an ionotropic glutamate receptor antagonist inhibited rapid changes in LDT stimulation-evoked NAc dopamine release, measured using in vivo fixed potential amperometry. In these mice, intra-VTA infusion of a muscarinic acetylcholine receptor antagonist also diminished the facilitatory actions of cocaine on LDT stimulation-evoked NAc dopamine release. Together these findings imply that acetylcholine and ionotropic glutamate receptors on LDT and VTA neurons mediate different and sometimes opposing effects on NAc dopamine release, while muscarinic acetylcholine receptors in the VTA impact the pharmacological actions of psychostimulant drugs such as cocaine. In addition to evidence that the M5 muscarinic subtype mediates aspects of drug reinforcement and withdrawal, these new data suggest that this receptor may serve as a novel target in the pharmacological treatment of drug addiction.